Primary biliary cirrhosis (PBC) is a chronic cholestatic liver disease that frequently leads to liver failure and death. No accepted form of medical therapy currently exists for this disease. Accumulation of toxic bile acids may perpetuate liver damage in PBC. Ursodeoxycholic acid is a non-toxic bile acid with decreased detergent power that can be used to alter the composition of bile favorably when given orally. Study aims are to 1) compare effects of UDCA versus placebo on alkaline phosphatase, aspartate aminotransferase, bilirubin, albumin, immunoglobulin M, and prothrobin time; 2) evaluate effects on symptoms such as fatigue and pruritus; 3) determine effects on development or clinical progression of esophageal varices, ascites or edema, and encephalopathy; 4) determine effects on histologic changes at 2 years; 5) determine whether UDCA favorably affects survival or need for transplantation; 6) assess toxicity & determine safety.